The Bank of England's Monetary Policy Committee has announced it is to cut the base rate by 0.5 percentage points, a decision which has been met with mixed reviews.
In response to the cut, the Council of Mortgage Lenders (CML) said it posed a challenge to already squeezed margins, which is unlikely to give scope to "lower discretionary mortgage rates further".
"Savings are the lifeblood of mortgage lending and unless lenders can offer competitive rates to savers, their ability to offer new mortgages is restricted," it continues.
A number of mortgage lenders, including Abbey, Nationwide and Halifax, have already revealed they will be passing on the rate cut to their customers.
The CML revealed earlier this year that gross lending in January declined by eight per cent on the previous month.
It was at its lowest monthly total since April 2001, the CML stated.
See Also: Property News (5994)
Date Published: 05 March 2009
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